Archive for December, 2008

The financial meltdown – what went wrong, and how do we move forward – Extracts from comments in IMD webletter, October 2008 by IMD-professors Hamilton – Cossin – Bris:

If it was foreseeable, why haven’t we learned from past mistakes?
Prof. Hamilton: Today there are very few people in the marketplace who have been through a previous crisis. Banks have been de-layering middle management and removing the “corporate experience” – the people who would mentor others and talk about the past. So there is a knowledge gap.

What message would you like to leave with our readers?

Prof. Hamilton: In the short term we are going to see more focus on business history and what happened in the past. Institutions like IMD can help the educational process by focusing as much on success stories as on situations where things have gone wrong. This “post-mortem” approach is an effective way to learn and schools like ours can make a big contribution here.

Prof. Cossin: I would urge people to focus on risks. We all underestimate risks. The important thing is to be aware of this and to work on it, prepare for and, as much as is possible, manage risks.

Prof. Bris: Finance education has become extremely relevant. The media, regulators and customers need to understand that the financial world is complex. Education in financial concepts and techniques is perhaps more important than ever.